Western Australia's Chief Justice Wayne Martin believes jailing mentally impaired people accused of serious crimes should be an "absolute last resort", and supervised release better protects the community in the long term.

Justice Martin has given evidence before Federal Parliament's Community Affairs References Committee on the indefinite detention of people with cognitive and psychiatric impairment in Australia.

Under WA law, the courts only have two options when people are found unfit to plead: they can either be indefinitely detained or unconditionally released.

Advocates have long pushed for the option of releasing of mentally impaired accused on community supervision orders.

Mr Mischin has promised to seek advice on the review's recommendations, but no changes to the act have yet been brought before Parliament.

Community release more beneficial

Justice Martin said it was an issue of risk management rather than punishment.

"Custody would be an absolute last resort," he told the committee.

He said people would have much better access to support services and treatment in the community, subject to conditions that minimised risk, than in custody.

"It's not the ideal situation for them I think because the jails are very crowded, there is a limited capacity upon those responsible for the prisons to provide them with the management that they need," he later said outside the hearing.

"So, if they can be managed in the community that's a better result for them and the community because it enables the risk to be managed in such a way that in the longer term the community's better protected."

Inspector of Custodial Services Neil Morgan told the committee people subject to indefinite custodial orders often spent more time in jail than if they had pleaded guilty.

He also pointed out they were given less "legal protection" than indefinitely detained dangerous sex offenders.

Unlike people with mental impairments, he said in the case of the sex offenders "the court must be satisfied the risk that person poses cannot be managed in the community and can only be managed in a prison setting".

He and Justice Martin also advocated an annual review of the custody order by a court, rather than leaving it to the Mentally Impaired Accused Review Board.

Indigenous accused 'massaged' into pleading guilty

Aboriginal Legal Service director of legal services Peter Collins estimated 95 per cent of all Aboriginal people before the courts had an intellectual disability or cognitive impairment.

He told the committee ALS lawyers were faced with a "terrible conundrum" because of the likelihood their clients could be found unfit to plead and made subject to indefinite custody orders.

"The overwhelming majority of Aboriginal people that are found unfit stay in custody for a very, very long period of time," Mr Collins said.

As a result, he said, the lawyers sometimes "massaged" their clients into a position where they could plead guilty and receive a criminal sentence rather than face the possibility of never being released.

"This obsession with incarceration has to end," he said, adding there had to be a greater focus on release, while acknowledging there were not enough resources on the ground.